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Friday, September 9, 2011

Candidates, Check Your Bank Accounts

California Democrats Reel

As Scope Of Embezzlement Grows

Allegations of fraud against a veteran California campaign treasurer have sent shock waves through the state’s Democratic congressional delegation, as lawmakers who used Kinde Durkee to keep track of their finances are now scrambling to find out whether their money has disappeared.

While Durkee has not been formally charged at this point, she is in jail in California and has been accused in an FBI criminal complaint of trying to defraud a state representative out of $677,000. On top of that, California Rep. Loretta Sanchez’s office tells POLITICO that her campaign account, managed by Durkee, has been virtually emptied out.

“What we’ve learned this week is that unfortunately, the amount in our reelect account is substantially less than the amount we’ve raised this year, as well as the amount reflected in the records sent to us by Durkee & Associates. In fact, our account has been nearly wiped out,” Adrienne Elrod, Sanchez’s chief of staff, told POLITICO on Thursday.

Sanchez reported having almost $379,000 in campaign funds at the end of June in her last quarterly filing with the Federal Election Commission.

Several of the campaigns for which Durkee served as treasurer have had trouble accessing their accounts at First California Bank because Durkee was the only one with authority to oversee their funds, sources tell POLITICO. Durkee manages hundreds of California campaign accounts.

Daniel Nixon, Durkee’s attorney, did not return a call seeking comment on the allegations against his client.

Durkee is a well-known money maven in California Democratic politics, serving as treasurer for hundreds of federal, state and local campaign committees, including those of Sen. Dianne Feinstein and Reps. Linda Sanchez, Bob Filner, Laura Richardson and Susan Davis, among others.

Feinstein’s reelection committee reported having a little more than $5 million in the bank as of June 30. Aides to Feinstein declined to comment on whether any funds are missing from the senator’s campaign fund. Feinstein will be up for reelection in 2012.

The FBI filed a criminal complaint against Durkee last Friday in the U.S. District Court for the Eastern District of California, alleging that she engaged in a scheme to defraud state Assemblyman Jose Solorio of $677,000. The case was filed in federal court because the complaint, signed by Special Agent Reginald L. Coleman, accuses Durkee of using the Postal Service to defraud Solorio.

According to that complaint, Durkee admitted during an interview with the FBI that she had been “misappropriating her clients’ money” for years and filing false statements to state authorities. Durkee “had signature authority over more than 400 bank accounts,” and she “routinely” moved money between her company accounts — Durkee & Associates — and campaign committees to cover business and personal expenses, including mortgages, American Express bills and even payments for a nursing home for her mother.